VAT on Written-Off Materials: Proving Inclusion in Finished Goods

• When writing off materials, assess if their cost is included in finished goods subject to VAT.
• If so, no VAT liabilities arise.
• Tax authorities do not specify how to prove this.
• If materials are fully used, no VAT is charged.
• If materials are written off prematurely but depreciation is 100%, no VAT is charged due to no residual value.
• If there is a residual value, VAT is charged, but it can be avoided if the asset was included in finished goods subject to VAT.
• Tax authorities do not specify how to prove this.
• Obtain an individual tax ruling for specific requests regarding proving asset inclusion in finished goods.

Source: news.dtkt.ua

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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